Russia 'making more money' from their gas supplies says Erlanger

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Belgium’s Energy Minister Tinne Van der Straete has warned that the struggle to cope with the major energy price hikes could long persist unless drastic measures are taken. It comes as Russia’s war in Ukraine shocked the market, while President Vladimir Putin’s gas cuts have further sent prices spiralling out of control.

Ms Van der Straeten has suggested that gas prices should be frozen to limit to devastating impacts the crisis threatens to bring to Europe.

The Belgian energy minister wrote on Twitter: “The next five to 10 winters will be terrible if nothing is done.

“We must act at the source, at [the] European level, and work on freezing gas prices.”

Ms Van der Straeten argued that a price cap could knock €770 (£658) off bills.

She also said gas prices should not be used to set the price of electricity, which is also reaching record highs as natural gas is still widely used to generate electricity.

Ms Van der Straeten continued: “The European energy market is failing and urgently needs reform.

“This is no longer tenable for many families and companies. Electricity is produced as cheaply as last year but sold at record prices. By reforming, we are tackling exuberant excess profits.

“The time for talking is over, now it is time to decide.”

Ben van Beurden, the chief executive of energy giant Shell, has also warned that the energy crisis could last multiple winters.

He has argued that it is a “fantasy” to believe that shortages could be addressed quickly, warning rationing could be needed for years.

Mr van Beurden said at an energy conference in Norway: “I do not think this crisis is going to be limited to just one winter.

“It may well be that we have a number of winters where we have to somehow find solutions through efficiency savings, through rationing, and through a very quick build out of alternatives that you may have alternative gas imports hopefully alternative energy sources.”

But many figures within the EU believe reforming the market is one solution.

Austrian Chancellor Karl Nehammer also agreed that the market needs reform.

He said: “We have to stop this madness that is happening right now on energy markets.

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“We cannot let Putin determine the European electricity price every day.”

European Commission President Ursula von der Leyen has said Europe’s energy market needs an “emergency instrument” to cope with the crisis, and has also supported calls to scupper the link between gas and electricity prices.

But currently, EU members are scrambling to boost gas storage facilities amid fears that Russia will cut even more gas over winter.

Germany, which is particularly dependent on Russian gas, reportedly managed to fill its storage facilities to 80 percent two weeks ahead of schedule.

But Marcel Fratzscher, president of the German Institute for Economic Research (DIW), has warned this still might not be enough to avoid a a gas shortage.

He said: “I think the chances are quite good that Germany will get to 90 percent storage capacity by the beginning of winter, but that still is not sufficient to really avoid a gas shortage.”

It comes after the Kremlin-controlled gas conglomerate Gazprom already slashed deliveries through the major Nord Stream 1 pipeline to Germany, blaming the move on infrastructure repairs delayed by sanctions.

While the EU is hoping to reduce its energy ties with Putin amid the war in Ukraine, it is still heavily dependent on Russian gas, which accounted for 40 percent of its total supplies last year.

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